—How Recent Announcements About Air Methods Affect Current Flight Crews.
This week Voce Capital publicly expressed its displeasure with Air Methods’ financial performance.
The following day, an article in the Wall Street Journal stated Air Methods is considering putting itself up for sale.
What does it mean for flight crews?
Voce Capital blasted Air Methods this week for issues dating back to the Summer of 2015.
Here is a summary list of Voce Capital’s concerns:
- Air Methods losing value over time (-24% in 2016, -4.8% in 2015, -24.4% in 2014)
- Air Methods stock undervalued, but company taking no corrective action (Short interest is 30% of float)
- Serious operational issues (Snags integrating Tri-State Care Flight)
In layman terms, Voce Capital believes Air Methods’ board of directors is stonewalling them. Voce feels it gave Air Methods ample time to correct issues it brought to Air Methods’ attention, and that Air Methods did little or nothing to fix the issues.
Click Here to read the letter Voce Capital sent to Air Methods.
What It Means In Plain English
What does all the above mean in plain English? And what the heck is a proxy fight, short interest or float?
First, understand the financial world has its own lingo — just like we do in air medical.
When you hear financial terms for the first time, it can be confusing. The purpose of this article is to eliminate confusion and clarify some of the announcements that came out this week about Air Methods. Step one — remind yourself financial folks are no smarter than medical folks. They simply speak a different language.
Let me prove it to you.
Proxy is a fancy word for vote. Short means you sold something you never owned (I’ll explain). And float is the amount of stock shares available to the public to buy or sell. Pretty simple, right?
Short is the only word that needs a little more explanation.
How exactly do you short sell something (like a stock) you don’t own? You just do it — it’s that simple.
You go through your broker or financial adviser and get approved to sell short. Then you sell stocks you don’t own. To realize a gain or loss, you complete the other side of the transaction.
What’s the other side of a sell short transaction? Easy answer. You buy the stock. So how does that work, exactly? Put simply, you can buy low and sell high, OR you can sell high (first) and buy low (second). Make sense?
I hope so. But if it doesn’t, don’t worry about it. And don’t waste any time trying to figure it out.
You don’t need to understand every financial term to get the gist of what’s happening with Air Methods. What matters is how recent announcements affect current and future Air Methods’ flight crews.
What If Air Methods Is Sold
Based on email volume, the Wall Street Journal article seemed the most troubling to air medical folks.
What if the company is sold? Will I keep my job? Will I have to move? Etc, etc.
Hopefully, I answered some of these questions above, but here’s a little more peace of mind if you need it.
Selling a $1.2 or $1.4 billion company (price changes based on closing stock price) isn’t the same as selling a used nursing book on craigslist. It’s complicated and time consuming. And as a general rule, the bigger the company, the slower the decision process.
Think of a dinosaur that gets the tip of its tail chopped off.
It takes 6 seconds for the pain stimulus to reach the cerebral cortex. Slow, very slow.
And if that still doesn’t give you peace of mind, think of all the stories lately about fake news.
What does fake news have to do with an announcement in the Wall Street Journal? As it turns out, a lot.
Don’t get me wrong.
The Wall Street Journal is real and credible. And the announcement is published.
But, only Air Methods knows Air Methods real intent. It may be a quick counter to Voce Capital’s public scolding, and nothing more. Or, a potential sale may be real. The point is that we don’t know for sure, yet.
What It Means For Flight Crews
How do this weeks announcements affect current and future Air Methods’ flight crews?
In the short term, there is no affect on flight crews.
In the medium and long term, situations like these can and do influence company morale and potentially your ability to do your job as flight crew.
Here’s what I mean: In the medium term, all kinds of gossip and rumors will flood the company. Everyone has an opinion about what’s going to happen next, and many co-workers will share their opinions freely.
Whether recent announcements lead to any changes or not, the gossip takes on a life of its own and can cause real damage. Why?
Because uncertainty creates fear.
It’s that’s simple.
Flight medics, nurses and pilots do challenging work. The last thing they need is worry about losing their jobs.
But announcements like these create enough uncertainty (via gossip) that sometimes flight crews do worry about losing their jobs.
What To Do Now
So what do you do now? Now that you know there’s some potential turbulence ahead?
How do you protect yourself?
Do these two things every day: remind yourself of the fact you cannot personally change the outcome of corporate level decisions. It’s simply not within your control.
Second, avoid gossip. It serves no good purpose and there’s no rule about having to participate. When the conversation comes up, excuse yourself from it. Do this a couple times and your co-workers will quickly figure out you’re not interested.
Remember the adage about spending 99% of your time worrying about things that only happen 1% of the time?
My advice is to keep it top of mind.
Don’t waste time worrying about things out of your control.
Do your job. Be happy. Fly safe.
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